Renting revamp will drive out landlords and cost tenants more, critics warn

Rental reforms being introduced by the Government are “counter-productive” and will drive decent landlords from the market while pushing up costs faced by tenants, it has been warned at Westminster.

Levelling the criticism in Parliament, Conservative shadow housing minister Baroness Scott of Bybrook accused the Government of rushing through legislation “without any care for the repercussions”.

But Labour housing minister Baroness Taylor of Stevenage argued the far-reaching changes were much needed, ensuring tenants can “put down roots in their communities” and enjoy the same stability as homeowners.

The Renters’ Rights Bill is currently making its way through the House of Lords, having already cleared the Commons.

The proposed legislation seeks to introduce several measures including an end to no-fault evictions, stopping bidding wars for tenancies, helping tenants challenge unreasonable rent increases and preventing landlords from demanding more than a month’s rent in advance from a new tenant.

Speaking at the start of the second reading debate, Lady Scott said: “The Renters’ Rights Bill is counter-productive.

“Whilst the Government may have good intentions, they will drive landlords from the market, reducing choice and putting up rent for the tenants they seek to protect.”

She pointed out 45% of landlords owned one property, while another 40% owned between two and four.

Lady Scott said: “In many, if not most cases, these are not professional landlords.

“To expect them to be able to cope with all the costs and burdens placed on them by this Bill is at best naive.

“Many decent landlords and safe quality homes will leave the rental market as a result.”

She added: “The Government are rushing it through without any care for the repercussions that will reverberate throughout the sector.”

Introducing the Bill, Lady Taylor said: “The private rental system needs to change. It currently provides the least affordable, poorest quality and most insecure housing of all tenures. The insecurity it engenders creates uncertainty in the lives of tenants and allows good landlords to be undercut by the minority of rogues and chancers.

“In short, the 11 million private renters and the 2.3 million landlords across England are being failed. The Renters’ Rights Bill brings forward the most significant changes to the sector for nearly 40 years. This Bill will strengthen the security of tenure for tenants, ensure they are paying a fair rent, guarantee a minimum standard that they can expect from a property, provide new robust avenues to redress and more.”

She added: “The Bill ensures tenants can put down roots in their communities. They deserve to enjoy that stability just as homeowners do. And we should reward landlords that provide the excellent service that so many of them do.”

Housing expert Lord Best argued that private landlords selling up and leaving the sector “could be positive” in terms of freeing up homes for owner-occupiers and social renting.

The independent crossbench peer argued that social landlords could buy up the properties, improving provision for those on low incomes and reducing the burden of housing benefits on the taxpayer.

He said: “Private renting is seldom the best option for those needing low rents, good quality and long-term security, nor does the enlarged private rented sector suit the taxpayer. The sector’s higher market rates has propelled more renters into housing benefit at escalating costs to the Exchequer.

“The private rented sector has found itself performing a role in place of councils and housing associations which suits neither the tenants nor the public purse. This Bill could help achieve some rebalancing between the private sector and the social sector.”

Lord Best suggested that, to incentivise such sales, the Government should consider an exemption from capital gains tax on the sale of properties from private landlords to social landlords.

The Bill received an unopposed second reading in the Lords and now goes for detailed line-by-line scrutiny by peers.